S&P 500 closes lower to begin 2024, Nasdaq notches worst day since October: Live updates

After finishing 2023 with a bang, the S&P 500 finished its first trading day of the new year in the red.

The 500-stock benchmark slid 0.57% to settle at 4,742.83, while the Nasdaq Composite lost 1.63% to close at 14,765.94, notching its worst day since October.

The Dow Jones Industrial Average, however, gained 25 points, or 0.07%, to 37,715.04. It had earlier gained as much as 100 points and lost nearly 194 during the day's trading session.

— Lisa Kailai Han

2023 was a banner year for stocks, and a look at the money flow indicates there could be even more gains in 2024.

Scott Rubner, managing director at Goldman Sachs, noted that global equities saw more than $172 billion in inflows last year. That's the lowest amount of inflows since 2019, he said.

"Have global asset allocators already pre-traded 'the January' move and switched their exposure into equities? The answer is no," Rubner wrote. He also noted that money market funds saw a whopping $1.34 trillion in inflows last year — exceeding the previous three years combined.

Bottom line: There's lots of money on the sidelines, and that could be good news for stocks.

— Fred Imbert

Stocks tend to do well over monetary easing cycles, according to Ned Davis Research.

"Equities, as represented by the S&P 500, have never rallied more than 11% in the three months leading up to the first Fed rate cut. On average, performance has been pretty flat," Joe Kalish, chief global macro strategist at Ned Davis Research, wrote on Tuesday. "But after the rate cut, stocks tend to rally for 6-7 months with a mean gain of roughly 12%."

Since 1970, equities rose in 11 out of 12 easing cycles, with a median gain of more than 15%, according to the strategist. The only decline occurred during the easing cycle in 2001 through 2003 after the burst of the dot-com bubble.

— Sarah Min

Oil prices fell on Tuesday as traders monitored rising tensions in the Red Sea, amid a backdrop of record U.S. production and faltering demand in China.

The West Texas Intermediate contract for February lost $1.27, or 1.77%, to settle at $70.38 a barrel. The Brent contract for March shed $1.15, or 1.49%, to trade at $75.89. 

Crude prices had jumped more than 2% earlier in the trading session on escalating tensions in the Red Sea, a crucial global trade chokepoint. 

Danish shipping giant Maersk said Tuesday it will pause shipping through the Red Sea until further notice after one of its vessels came under attack by militants over the weekend.

"The market is basically saying 'we will wait and see until something happens,'" Helima Croft with RBC Capital Markets told CNBC on Tuesday. "But it's really getting much more serious every day," she said of tensions in the region.

— Spencer Kimball

Don't be surprised if the S&P 500 pulls back to 4,650 during the first half of 2023, according to Stifel's Barry Bannister.

"The market is simply expensive, versus the financial conditions index and the 10-year yield, and we don't really see outside of recession much chance in the tenure remaining below 4%," the chief equity strategist told CNBC's "Squawk on the Street" on Tuesday.

Without the employment market showing signs of weakening, Bannister added that he doesn't expect a recession.

— Samantha Subin

Value stocks will be this year's winner, according to Wharton School professor of finance Jeremy Siegel.

"2022 was fantastic for value, and then it just totally got reversed in 2023...we're in that alternating fashion," Siegel said, noting that the ratios of the Russell 2000 favor value stocks. Looking at valuation, Siegel noted that the P/E ratio of the Russell 1000 growth stocks is nearly double that of the Russell 1000 value stocks.

"Growth stocks should have a higher multiple, but this is a much bigger gap than normal," Siegel told CNBC earlier Tuesday. "I don't think that this means any sort of collapse or anything for the growth stocks...The S&P is on track for perhaps 8% to 10%, and that includes all the stocks, but I think we could have the value sector of the market do 15%."

Siegel added that he believes a soft landing is still the most likely scenario for the economy, and forecasted an acceleration in the market only towards the end of the year into 2025.

— Pia Singh

As investors wait to hear more details about how the holiday season shaped up for specific retailers, Telsey Advisory Group has done some digging into Google Trends search data as a way to gauge consumer interest. The firm said several patterns emerged: Black Friday marked the most consumer interest; the bigger and more established the brand, the more interest there was; and the retailers who reaped the most interest were Amazon, Walmart, Nike, Ugg and Kohl's.

Among the numerous specialty apparel brands, searches for Lululemon "dwarfed" all other brands, Telsey said.

In trading Tuesday, these stocks were mixed. Nike was the only loser in the group in 2023, with a 7% decline in its stock price. Amazon ended 2023 up about 80%. Following the e-commerce giant was Deckers stock with a 68% gain last year, Lululemon with a 60% increase, then Kohl's, which gained 14%, and Walmart, which rose 11%.

—Christina Cheddar Berk

Ongoing AI tailwinds could boost the Nasdaq to new highs in 2024, according to Wedbush Securities' Dan Ives.

"While we can see ebbs and flows in the coming months given Fed jawboning/macro factors, we believe tech stocks will be up 25% in 2024 with a NASDAQ 20k level our bull case scenario as the Street is still significantly under estimating how quickly this AI monetization cycle is playing out among enterprises in the field," he said in a note to clients.

According to Ives, the new bull market for technology stocks is currently underway as companies ramp up spending behind artificial intelligence. The behemoths, along with a handful of software and chip companies, may have led the early stage, but Ives expects breadth to broaden well beyond the Magnificent 7 in 2024.

This setup could create a potential "tidal wave" of merger and acquistions activity within the software and chipmaking space, Ives wrote, noting that he favors technology giants Apple, Microsoft and Alphabet, along with MongoDB, Palo Alto Networks and Palantir.

— Samantha Subin

Check out the companies making headlines in midday trading.

• Moderna — The drugmaker jumped 16% following an upgrade to outperform by Oppenheimer. The firm said Moderna's multiple product launches in the next 12 to 18 months should help top-line sales start to grow in 2025. Moderna fell more than 40% in 2023.
• Apple — Apple slid 3% in midday trading. Barclays downgraded the tech stock, citing poor volumes of iPhone 15s, in addition to Macs, iPads and wearables.
• GoodRx — The telemedicine stock tumbled about 14% after Bank of America downgraded GoodRx to underperform from buy, citing increased competition from the large pharmacy benefits managers.

Read the full list here.

— Sarah Min

As tech stocks slide on the first trading day of 2024, cyber security stocks are performing worse than the Nasdaq.

Several ETFs tracking the theme were down 2% or more on the day, including the iShares Cybersecurity and Tech ETF (IHAK) and the Global X Cybersecurity ETF (BUG). The First Trust Nasdaq Cybersecurity ETF (CIBR) fell 2.3%.

Some of the biggest cybersecurity stocks saw even larger declines, with Crowdstrike and Zscaler each falling more than 3%.

— Jesse Pound

13 stocks in the S&P 500 hit new 52-week highs during Tuesday's trading session, the first of the new year.

Of these 13 names, eight stocks hit new all-time highs. Here's a look at some of the stocks that reached the milestone:

• T-Mobile US
• Marriott International
• Ross Stores
• Amgen
• General Dynamics
• Waste Management

— Lisa Kailai Han, Christopher Hayes

Last year's winning chipmaking stocks fell to start 2024 trading as some investors took profits after a breathtaking 2023.

Major laggards included Nvidia and Advanced Micro Devices, last down 3.3% and 4.9%, respectively. Intel, another big 2023 winner, slumped 3.4%, while Marvell Technology declined more than 2%.

The iShares Semiconductor ETF was last down nearly 3%, dragged down by some of these popular names.

Technology stocks declined across the board on Tuesday, with Apple down 3% following a Barclays downgrade. Meta Platforms and Salesforce sank about 3%, while Microsoft and Amazon slipped about 2% each.

— Samantha Subin

Cruise stocks fell Tuesday on higher oil prices.

Carnival Corporation was down 3.9%, Norwegian Cruise Line fell 6.2%, and Royal Caribbean shed 4.2%.

U.S. crude oil prices rose more than 2% earlier in the trading session due to escalating tensions between the U.S. and Iran-backed militants in the Red Sea, a critical global trade route.

The West Texas Intermediate contract for February later shed most those gains to trade 18 cents, or .25%, higher at $71.83 a barrel.

— Spencer Kimball

Construction expenditures rose less than expected in November as the housing industry struggles to keep up with a lack of supply.

New spending increased 0.4% on a monthly basis and was up 11.3% from a year previous, the Commerce Department reported Tuesday. Economists surveyed by Dow Jones had been looking for growth of 0.6%.

Private spending increased 0.7% on a monthly basis while public spending fell 0.7%. Residential construction spending increased 1.1%.

—Jeff Cox

After a dismal 2023, Moderna shares are moving higher in the new year. The stock jumped more than 11% after being upgraded to outperform by Oppenheimer Tuesday.

The drugmaker, which fell more than 40% in 2023, has multiple product launches in the next 12 to 18 months, analyst Hartaj Singh said in a note to clients. That should help top-line sales start to grow in 2025, he said.

"We also expect material clinical and regulatory catalysts ... in this timeframe, making us bullish on the name again," Singh wrote.

His $142 price target implies nearly 43% upside from Friday's close.

— Michelle Fox

US Foods Holding is now a better choice for Guggenheim's "Best Idea" rather than Dollar General, although both remain buy-rated, analysts led by John Heinbockel wrote.

Guggenheim cited USFD's "resilient business model, solid operating momentum, a still-modest valuation, and several 1H catalysts" as likely to "drive meaningful outperformance."

Dollar General turned out to be a miserable call in 2023, but USFD "under CEO Dave Flitman, is well-positioned in our view to deliver 10% EBITDA growth in 2024E, regardless of the macro backdrop, while trading at a below-average 9.7x our 2024E EBITDA." Guggenheim lifted its USFD price target to $55 from $52, implying 22% upside for the shares.

— Scott Schnipper, Michael Bloom

The U.S. manufacturing sector shrank more than expected in December, according to a new purchasing manager's index from S&P Global.

The Manufacturing PMI came in at 47.9 in December, down from 49.4 in November and below the 48.2 expected by economists, according to Dow Jones. A decline in new orders was one of the factors that weighed on the PMI.

"Given current order book trends, the overall picture from the survey is one of supply exceeding demand for many goods, which points to downside risks to production, employment and prices as we head into 2024," Chris Williams, chief business economist at S&P Global Market Intelligence, said in the release.

— Jesse Pound

Oil prices were volatile in the first day of 2024 trading, as traders monitor tensions rise in the Red Sea after clashes between U.S. forces and Iran-backed militants based in Yemen.

The West Texas Intermediate contract for February added 2 cents, or .03%, to trade at $71.67 a barrel on Tuesday. The Brent contract for March gained 16 cents, or .21%, to trade at $77.20. Crude prices had jumped more than 2% earlier in the trading session.

Energy stocks rose in early trading with APA Corporation, ConocoPhilips, Diamondback Energy, Exxon Mobil, Valero, Marathon Oil, and Baker Hughes up more than 1%.

U.S. Navy helicopters on Sunday responded to a distress call from the container ship Maersk Hangzhou after the vessel came under attack from four small boats crewed by Houthi militants.

The U.S. returned fire after coming under attack from the Iran-backed militants, sinking three boats and killing the crews, according to U.S. Central Command.

An Iranian destroyer on Monday passed through the Bab el-Mandeb Strait and entered the Red Sea, according to Iran's Tasnim news agency.

Houthi militants have repeatedly attacked vessels in the Red Sea in recent weeks in response to the war in Gaza, raising fears about disruptions to shipping through the key trade route.

"The real impact of this weekend's action could be that more container ships will refuse to go through the Red Sea until they deem it to be safe," oil market analyst Phil Flynn with the Price Futures Group wrote in a morning note.  "That will increase shipping times and add to costs." 

OPEC and its allies are also expected to start implementing production cuts of 2.2 million barrels per day, as promised at their last meeting in November.

— Spencer Kimball

Stocks opened down on Monday to kick off the first trading day of 2024.

The Dow Jones Industrial Average dipped 92 points, or 0.3%. The S&P 500 slid 0.5%, while the Nasdaq Composite slipped 0.9%.

— Lisa Kailai Han

Tesla delivered more vehicles than expected in the fourth quarter, which helped it hit its 2023 target.

Wedbush analyst Dan Ives said it was "an important quarter for Tesla to show strong deliveries with clear momentum into 2024 as demand has upticked since 3Q based on all our global checks."

The electric car maker said deliveries in the latest quarter totaled 484,507, which was higher than the 477,000 estimate compiled by StreetAccount. That brought its tally for the year to 1,808,581.

In October, Tesla said it expected to deliver at least 1.8 million vehicles in 2023, which was lower than 2 million deliveries it had previously anticipated.

Vehicle production rose to 494,989 in the fourth quarter. For the year, Tesla produced 1,845,985 vehicles, it said.

"This was a clear win for Musk and Tesla as hitting 1.8 million vehicles for 2023 was a major achievement in a choppy macro for EVs," Ives added, reiterating his outperform rating.

In premarket trading, Telsa shares were up nearly 1% on the news. Last year, Tesla shares more than doubled.

—Christina Cheddar Berk

The U.S. dollar, in the first trading day of the year, was headed for its best day since July. The dollar index was last higher by 0.81%, or its best performance since July 27, 2023, when it gained 0.88%.

Those moves follow a down year in 2023, when the dollar index ended two years of gains as investors anticipated rate cuts later this year from the Federal Reserve.

— Sarah Min, Nick Wells

Here are some of the names moving before the bell:

• Estee Lauder — Shares slipped 2.2% after being downgraded by Deutsche Bank to hold from buy. The bank said it sees near-term risk if the U.S. market slows and the cosmetic giant's China inventory and economic rebound is delayed.
• GoodRx — The stock dropped nearly 7% following a downgrade to underperform from buy at Bank of America Securities. The bank cited changes to the competitive landscape for the call.
• Baidu, Joyy — U.S.-listed shares of Chinese tech giant Baidu slipped 2% after the company halted its planned acquisition of Joyy's live-streaming business in China. Joyy fell more than 10%.

To see more premarket movers, read the full story here.

— Michelle Fox

Markets wrapped up 2023 with nine straight weeks of gains, as investors embraced the possibility of easier monetary policy this year from the Federal Reserve.

But in a note from January 1, Raymond James analyst Tavis McCourt warned that investors may be getting too far ahead of themselves with their hopes of an optimistic economic outcome.

"A word of caution heading into 2024 is that the equity market seems as convinced about a soft landing today as it was convinced of a recession in 2022," the analyst wrote. "In both cases, the short term lesson is not to stand in the way of a market that wants to express an opinion, while the longer term lesson is that the economy is a tortoise, and no matter the conviction level the equity market wants to have, the economy will take longer than most think to reveal its ultimate answer."

— Lisa Kailai Han

Barclays kickstarted the new year with a downgrade to Apple stock, sending shockwaves rippling through the broader equity market.

Analyst Tim Long downgraded shares of the tech titan to underweight from equal weight. He cited weakening sales volumes for iPhones, iPads, Macs and wearable devices as a reason for the downgrade.

Shares of Apple were down 1.9% in premarket trading. The company surged 48.2% in 2023 to notch its biggest annual gain since 2020.

Apple's downgrade dragged the broader market down, with futures on the Dow Jones Industrial Average falling more than 200 points. S&P 500 futures slipped 0.7%, while Nasdaq 100 futures shed 1%.

— Lisa Kailai Han

Bitcoin traded above $45,000 for the first time since April 2022 to start the year, adding to the digital currency's sharp gains over the past 12 months. Bitcoin was last at $45,605, up 4.3% on the day, according to Coin Metrics. Over the past year, its up more than 170%.

— Fred Imbert

European stock markets opened higher Tuesday.

The benchmark Stoxx 600 index was up 0.43% at 8:05 a.m. London time, while most sectors moved higher. Oil and gas led gains, up 1.3%, as technology stocks slipped 0.2%.

Germany's DAX and France's CAC 40 both charged around 0.5% higher, while the U.K.'s FTSE 100 was up 0.25%.

— Jenni Reid

The Dutch government has partially revoked semiconductor equipment maker ASML's export license to China for two of its systems used in manufacturing advanced chips.

"A license for the shipment of NXT:2050i and NXT:2100i lithography systems in 2023 has recently been partially revoked by the Dutch government, impacting a small number of customers in China," said ASML in a statement.

NXT:2050i and NXT:2100i are deep ultraviolet lithography machines used in the volume production of the most advanced logic and memory chips.

The company said it does not expect the move to have a material impact on its financial outlook for 2023.

ASML has been restricted by the Dutch government from exporting its extreme ultraviolet lithography machines to China, in a bid to contain China's chip making tech. ASML has not shipped the equipment to China so far.

— Sheila Chiang

A private survey showed manufacturing activity in China expanded in December, at odds with a similar survey conducted by the country's statistics bureau that reported a contraction.

The Caixin manufacturing purchasing managers' index came in at 50.8 in December, according to a release Tuesday, following a 50.7 reading for November. China's official PMI fell to 49.0 in December from 49.4 the previous month, the country's National Bureau of Statistics said in a Sunday release.

A PMI reading above 50 indicates expansion in activity, while a reading below that level points to a contraction.

— Clement Tan

Singapore's economy grew 2.8% year-on-year in the final quarter of 2023, according to advance estimates from the country's Ministry of Trade and Industry.

This was a sharp increase from the 1% expansion recorded in the third quarter, and the fastest rate of growth since the third quarter of 2022.

On a quarter-on-quarter seasonally-adjusted basis, the economy expanded by 1.7%, a larger expansion than the 1.3% in the third quarter.

Read the full story here.

— Lim Hui Jie

Australia's factory activity in December saw its sharpest contraction since May 2020, according to private surveys from Judo Bank.

The country's manufacturing purchasing managers' index slid to 47.6 in December, down from 47.7 in November and marking its 10th straight month of contraction.

In its release, the bank wrote that this was mainly due to a further deterioration in demand from the country's manufacturing sector, with incoming new orders for Australian manufactured goods falling for a 13th straight month.

This was because of soft economic conditions and pressure from high interest rates, with the bank adding that foreign demand was also subdued.

— Lim Hui Jie

Investors are on record watch as the S&P 500, with its Friday close of 4,769.83, is now less than 1% away from a new high.

A close above 4796.56, the record the equity benchmark reached in January 2022, would constitute a new all-time high. The S&P 500's current intraday record is 4818.62 also from January 2022.

— Yun Li

A banner year with the S&P 500 gaining more than 20% could suggest more good news in the following year if history is any guide, but don't expect a bigger year than 2023, according to Ryan Detrick, Carson Group's chief market strategist.

Dating back to 1950, there have been 21 times that the S&P 500 logged a yearly gain at least 20%. What happens the next year is that the equity benchmark has been in the green 80 of the time with an average return of 10%, the strategist said.

Only once in history — in 1997 — did stocks gain more the next year, Detrick said.

— Yun Li